Breakout stock! Avic Chengdu Aircraft share price jumps amid Israel-Iran war. Do you own?

Avic Chengdu Aircraft share price: The latest flare-up in the tensions in the Middle East gave a fresh boost to shares of J-10 fighter jet maker — AVIC Chengdu Aircraft — driving them higher for the second day in a row. The fresh escalation in the Iran-Israel conflict has resulted in a nearly 15% rise in AVIC Chengdu Aircraft share price as investors believe that the rising tensions could likely drive the demand for Chinese defence equipment.

Although analysts highlighted that this rally is more sentiment-led and speculation-driven.

AVIC Chengdu Aircraft share price trend

AVIC Chengdu Aircraft share price rallied as much as 3.5% to 91.08 yuan in intraday trade on Monday, June 16, adding on to an 11.2% rally seen on Friday. The J-10 fighter jet stock had risen 30% in May and is up another 15% in June so far.

The fresh interest in the stock can be initially attributed to the India-Pakistan conflict, which resulted in a sharp spike in May, and now to the Iran-Israel tensions, which are giving a fresh leg up to the stock.

Prior to May, AVIC Chengdu Aircraft shares had declined for four straight months.

China and Iran have a 25-year strategic partnership, entered into by the countries in 2021, which encompasses various areas, including economic, political, and military cooperation.

"While so far China has not given Iran any high-end defence technologies, including any fighter jets. But there are speculations that now nobody will supply to Iran, with Russia and China as likely candidates," said Dr Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital. However, he added that the rally is highly speculative in nature.

Commenting on the outlook for AVIC Chengdu Aircraft stock, Anshul Jain, Head of Research at Lakshmishree Investments, said, “AVIC Chengdu Aircraft's share price broke out of an 18-day cup and handle pattern that is part of a larger flag formation, triggering a bullish signal at 86 yuan per share.”

For the breakout to sustain, AVIC Chengdu Aircraft's stock price must hold above the key support zone at 79 yuan apiece, Jain opined. He believes a swift move toward 105 yuan per share is highly likely if this level holds.

The broader structure indicates consolidation within strength, and any volume expansion will further support the bullish continuation, Jain added.

Iran-Israel conflict

With no signs of thaw in Iran-Israel tensions, the rub-off effect on Chinese defence stocks could continue. The Iran-Israel conflict is heating up as both nations launched fresh attacks on Sunday, killing and wounding civilians and raising concerns of a broader regional conflict. The conflict is raging for a third day, with neither country backing down.

Iran said Israel struck its oil refineries, killed the intelligence chief of its paramilitary Revolutionary Guard and two other generals and hit population centres in intensive aerial attacks that raised the death toll in the country since Israel launched its major campaign on Friday to 224 people, according to a PTI report.

Israel, which has aimed its missiles at Iran's rapidly advancing nuclear programme and military leadership, said Iran has fired over 270 missiles since Friday, 22 of which slipped through the country's sophisticated multi-tiered air defences and caused havoc in residential suburbs, killing 14 people and wounding 390 others.

Meanwhile, US President Donald Trump said he hopes Israel and Iran can broker a deal, but said sometimes countries have to fight it out first.

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